How your finances can help the planet

Moving the account, you use for daily spending is one of the simplest ways to ensure that your money is environmentally friendly. Building an audience and teaching others about cash isn’t always easy. To be successful and join the ranks of the most visible influencers, you must have a loyal fan base. Thus, the first step in teaching others about money is determining who you want to help with your advice and what problems you can assist them with.

It’s often difficult, if not impossible, to find out precisely what the big banks are investing or supporting in other ways with people’s money.

Based in Bristol and part of a group founded in the Netherlands, Triodos Bank is arguably the UK’s most ethical current account provider. It claims to only fund organizations that positively impact people and the environment. Its existing account comes with a contactless debit Mastercard and an overdraft of up to £2,000. However, there is a £3 monthly fee and no high street branches, so it is not for everyone.

According to Ethical Consumer, an independent, non-profit organization that reviews companies and products, the Co-operative is the only high street bank that explicitly prohibits fossil fuel support. The Co-operative Bank refers to itself as “the original ethical bank,” but it is now majority-owned by a group of hedge funds and fund managers, which may cause concern for some.

Then there are app-based banks like Monzo and Starling, which may be “cleaner” in terms of what they invest in and lend to because they are newer, smaller, and don’t necessarily have financial interests all over the world. Still, they aren’t as transparent as a bank like Triodos.

“If you’re looking to switch to an app-only bank, Starling appears to be marginally more engaged on ethical issues than the others,” according to the website of Ethical Consumer.

A building society is another option because its members rather than shareholders own it. Nationwide, the largest offers a variety of current accounts.

Sort out your savings

The good news is that there is a lot more variety. Ecology, for example, is a building society that uses savings to fund environmentally friendly mortgages. It provides a variety of accounts, including easy-access and regular-savings accounts that pay 0.1 percent and 0.8 percent, respectively.

Triodos Bank offers a variety of accounts, including a junior cash Isa (for those saving for a child) that pays 1.5 percent right now.

Charity Bank makes loans to charities and social enterprises and offers notice accounts with interest rates as high as 0.35 percent and fixed-rate bonds with interest rates as high as 0.75 percent. Another option is to join a credit union.

Invest well

Many adults find money to be a perplexing subject. While 56 percent of Americans say they’d give themselves an A or B regarding financial literacy, 75 percent say they could still benefit from financial advice and answers. According to the National Financial Educators Council, the average American will pay $1,389 in 2021 due to a lack of financial literacy. If you’re knowledgeable about money and want to share your knowledge with others, you might want to consider becoming a personal finance influencer.

There are numerous green/ethical/sustainable funds available. Which investments you choose will, to a large extent, be determined by your personal preferences and the level of risk you are willing to accept.

“With more options than ever before and performance that compares favorably to traditional funds, there’s little reason not to choose a sustainable fund for your Isa or other investments,” says Lisa Stanley, co-founder of the ethical money website Good With Money.

“It’s important to get under the hood and ask some of the hard questions to make sure a provider is as green as they appear to be,” says David Macdonald of The Path Financial.

If you are investing without the assistance of a financial advisor, there are an increasing number of apps, investment platforms, and the like that provide ready-made green portfolios.

Clim8 Invest, Circa5000 (formerly known as tickr), The Big Exchange (co-founded by The Big Issue), Wealthify’s ethical plans, and Moneybox’s socially responsible options are among those Stanley favors.

Meanwhile, Sugi assists you in calculating the carbon footprint of your current investments and offsetting your portfolio.

Ethical investment platforms enable people to directly invest in bonds or shares issued by charities and businesses. They include Ethex and Abundance. However, there are steps you can take to make your retirement fund more environmentally friendly.

Most workplace pension plans automatically enroll members in a “default fund,” which may or may not be environmentally friendly. However, many companies provide an ethical or sustainable fund option, and employees can choose to contribute some or all of their salary to it. Speak with the scheme’s trustees if you’re not sure what the deal is.

The good news is that, in recent years, several prominent UK workplace pension schemes have taken action, such as setting net-zero carbon emissions targets for their holdings.

Go for a greener insurer

Because a policy may involve several companies, insurance can be complicated regarding the environment. However, a comparison website can help you find a provider, the procedure underwritten by a different company.

Zurich, Axa, and Aviva are among the insurers with “better” climate change policies, according to Ethical Consumer. The latter intends to achieve net zero emissions by 2040.

“On the smaller side, Naturesave offers home, travel, and business insurance, donates 10% of its annual home and travel insurance revenue to charity, and plants a tree for every new policy issued,” Stanley says. The Co-op sold its insurance underwriting business at the end of 2020.

Green mortgages are go

A growing number of financial institutions are offering mortgages that incentivize the purchase or ownership of an energy-efficient home by providing borrowers with better terms than are typically available. It usually translates into a slightly lower interest rate, a cashback payment when the deal is signed, or both. Some of these loans are only available to people purchasing a new home. NatWest, Barclays, Nationwide, and Leeds Building Society are among the lenders offering such deals, with more joining the list all the time.

Aside from the above deals, according to Ethical Consumer, building societies are a better bet in general when it comes to mortgages because they lend primarily in the housing market rather than other less ethical sectors.